Advisory Fuel Rates from 1 September

Advisory Fuel Rates from 1 September 2015

GOV.Uk image 2727733_orig

Advisory Fuel Rates (AFR) for company car users, when you can use them, and how they are calculated.

These rates apply from 1 September 2015. You can use the previous rates for up to 1 month from the date the new rates apply.

Engine size Petrol – amount per mile LPG – amount per mile
1400cc or less 11 pence 7 pence
1401cc to 2000cc 14 pence 9 pence
Over 2000cc 21 pence 14 pence

 

Engine size Diesel – amount per mile
1600cc or less 9 pence
1601cc to 2000cc 11 pence
Over 2000cc 13 pence

Hybrid cars are treated as either petrol or diesel cars for this purpose.

  1. Current rates

Current rates start from 1 September 2015.

  1. When you can use the mileage rates

The rates only apply when you either:

  • reimburse employees for business travel in their company cars
  • require employees to repay the cost of fuel used for private travel

You must not use these rates in any other circumstances. If you use them correctly you will not need to apply for a dispensation to cover the payments you make.

2.1 Reimburse employees for business travel in their company cars

If you pay a rate per mile for business travel no higher than the AFR, for the particular engine size and fuel type, HM Revenue and Customs (HMRC) will accept there is no taxable profit and no Class 1A National Insurance to pay.

You can use your own rates which better reflect your circumstances if, for example, your cars are more fuel efficient, or if the cost of business travel is higher than the guideline rates.

If you pay rates that are higher than the advisory rates and can’t demonstrate the fuel cost per mile is higher, there is no fuel benefit charge if the mileage payments are solely for miles of business travel. Instead, you will have to treat any excess as taxable profit and as earnings for Class 1 National Insurance purposes.

2.2 Require employees to repay the cost of fuel used for private travel

If you have correctly recorded all miles of private travel and used the correct rate (or anything higher) to work out the cost of fuel used for private travel that the employee must repay to you, HMRC will accept there is no fuel benefit charge.

The advisory rates will not be binding where you can demonstrate that employees cover the full cost of private fuel by repaying at a lower rate per mile.

  1. How rates are calculated

Rates are calculated based on fuel prices and adjusted miles per gallon figures.

  1. Previous rates

Previous rates are available to check from 1 March 2011.

These rates only apply to employees using a company car.

These Advisory Fuel Rates (AFR) are calculated from the fuel prices in the tables below.

Petrol

Engine size (cc) Mean MPG Applied MPG Fuel price (per litre) Fuel price (per gallon) Pence per mile AFR
Up to 1400 53.74 45.7 114.6 520.9 11.4 11
1401 – 2000 43.52 37.0 114.6 520.9 14.1 14
Over 2000 29.03 24.7 114.6 520.9 21.1 21

Diesel

Engine size (cc) Mean MPG Applied MPG Fuel price (per litre) Fuel price (per gallon) Pence per mile AFR
Up to 1600 64.91 55.2 112.0 509.4 9.2 9
1601 – 2000 55.52 47.2 112.0 509.4 10.8 11
Over 2000 45.42 38.6 112.0 509.4 13.2 13

LPG

Engine size (cc) Mean MPG Applied MPG Fuel price (per litre) Fuel price (per gallon) Pence per mile AFR
Up to 1400 43.0 36.5 59.4 270.0 7.4 7
1401 – 2000 34.8 29.6 59.4 270.0 9.1 9
Over 2000 23.2 19.7 59.4 270.0 13.7 14

Notes

Mean MPG – miles per gallon – from manufacturers’ information, weighted by annual sales to businesses (fleet audits average, 2011 to 2013).

Applied MPG – adjusted downwards by 15% to take account of real driving conditions and lower fuel economy for older cars.

For LPG, MPG is assumed to be 20% lower than for petrol due to lower volumetric energy density.

Figures are shown to one decimal place. Figures ending in .5 are rounded downwards to the nearest whole penny for the AFR when the precise figure is less than .5 and upwards to the nearest whole penny for the AFR when the precise figure is .5 or greater.

Department for Energy and Climate Change latest petrol and diesel prices (17 August 2015), LPG (UK Average) from Automobile Association (AA) website (July 2015).

Guidance

Advisory Fuel Rates 1 March 2011 to 31 August 2015

Updated 27 August 2015

Contents

  1. AFR 1 June 2015 to 31 August 2015
  2. AFR 1 March 2015 to 31 May 2015
  3. AFR 1 December 2014 to 28 February 2015
  4. AFR 1 September 2014 to 30 November 2014
  5. AFR 1 June 2014 to 31 August 2014
  6. AFR 1 March 2014 to 31 May 2014
  7. AFR 1 December 2013 to 28 February 2014
  8. AFR 1 September 2013 to 30 November 2013
  9. AFR 1 June 2013 to 31 August 2013
  10. AFR 1 March 2013 to 31 May 2013
  11. AFR 1 December 2012 to 28 February 2013
  12. AFR 1 September 2012 to 30 November 2012
  13. AFR 1 June 2012 to 31 August 2012
  14. AFR 1 March 2012 to 31 May 2012
  15. AFR 1 December 2011 to 29 February 2012
  16. AFR 1 September 2011 to 30 November 2011
  17. AFR 1 June 2011 to 31 August 2011
  18. AFR 1 March 2011 to 31 May 2011

Detail

These rates only apply to employees using a company car.

HM Revenue and Customs review rates quarterly on 1 March, 1 June, 1 September and 1 December.

You should check to make sure you understand when you can use the rates.